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23. Assume that Miriam's consumption function is C = a+ b(Yd), where Yd (Y – T) is disposable income, defined as the difference between income Y and taxes T. You observed that, after an increase in taxes T by $80, Miriam's consumption C decreased by $60. If Miriam's income (Y) did not change, you can deduce that her marginal propensity to consume (MPC) is (a) 0.6 (b) 0.75 (c) 0.8 (d) -0.6

23. Assume that Miriam's consumption function is C = a+ b(Yd), where Yd (Y – T) is disposable income, defined as the difference between income Y and taxes T. You observed that, after an increase in taxes T by $80, Miriam's consumption C decreased by $60. If Miriam's income (Y) did not change, you can deduce that her marginal propensity to consume (MPC) is (a) 0.6 (b) 0.75 (c) 0.8 (d) -0.6

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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23. Assume that Miriam's consumption function is C = a+b(Y), where Yd (Y-T) is disposable income, defined as the difference between income Y and taxes T. You observed that, after an increase in taxes T by $80, Miriam's consumption C decreased by $60. If Miriam's income (Y) did not change, you can deduce that her marginal propensity to consume (MPC) is (a) 0.6 (b) 0.75 (c) 0.8 (d) -0.6
Transcribed Image Text:23. Assume that Miriam's consumption function is C = a+b(Y), where Yd (Y-T) is disposable income, defined as the difference between income Y and taxes T. You observed that, after an increase in taxes T by $80, Miriam's consumption C decreased by $60. If Miriam's income (Y) did not change, you can deduce that her marginal propensity to consume (MPC) is (a) 0.6 (b) 0.75 (c) 0.8 (d) -0.6
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